September Grain Stocks Report - Initial Reaction
USDA | September 30, 2021
Immediate Reaction to the Grain Stocks Report
The USDA released the quarterly Grain Stocks and Acreage Reports on 09/30/2021. The full report can be found at: https://www.nass.usda.gov/Publications/
Top Takeaways:
#1. Wheat inventories come in at the low end of expectations providing the fuel needed to boost wheat prices in the day’s trade.
#2. Soybean inventories came in higher than the highest analyst estimate in a Bloomberg survey. This was a bearish surprise for soybean prices
#3. Corn inventories came in at the higher end of expectations. Corn futures sold off on the news.
The Breakdown
Corn
Quarterly Stocks
The USDA reported corn stocks[1] of 1.24 billion bushels, which is well above the average analyst estimate of 1.15 billion bushels according to a Bloomberg survey. The higher-than-expected carry-out[2] is somewhat surprising but may be reflecting a slower pace of corn exports over the last 90 days.
Market Reaction
Corn futures sold off on the news, turning negative after being in the green for most of the session.
Wheat
Quarterly Stocks
The USDA reported wheat stocks of 1.78 billion bushels, which is 75 million bushels below the average analyst estimate surveyed by Bloomberg. The number signals that demand for US wheat remains strong.
Market Reaction
Wheat futures prices advanced on the news and have since pulled back but are still trading higher on the day.
Soybeans
Quarterly Stocks
The USDA reported soybean stocks of 256 million bushels, which is 54 million bushels above the highest analyst estimate surveyed by Bloomberg. NASS increased last year’s soybean production estimates by 80.8 million bushels. The report surprised the markets but may in part be explained by Increased production estimates and a slower than expected pace of export sales.
Market Reaction
Soybean prices where trading mixed ahead of the report but headed sharply lower on the release.
[1] Inventories, a.k.a. “stocks”
[2] Carry-Out is also known as Ending Stocks is the amount of a crop that will be, or is, available at the beginning of the crop year from the previous year’s harvest.